Brussels, 24/11/2011 (Agence Europe) - On 23 November, the European Commission approved the proposed acquisition of Hitachi Global Storage Technology (HGST), a subsidiary of Hitachi of Singapore recently renamed Viviti Technologies, by rival Western Digital (WD) of the US. The approval is conditional upon certain commitments made by WD to: - divest essential production assets for the manufacture of 3.5-inch hard disk drives (HDDs), including a production plant, the transfer or licensing of the IP rights used by the divestment business, the transfer of personnel and the supply of HDD components to the divestment business; - not to close its proposed acquisition of HGST before concluding a binding agreement for the sale of the divestment business to a suitable purchaser approved by the Commission.
The Commission's objections to this acquisition focused on the fact that on the markets for 3.5-inch Desktop HDDs and Consumer Electronics HDDs, the merged entity would only face competition from the recently merged Seagate/Samsung. Toshiba, the other potential competitor likely to supply these products is a new entry onto the market and it is uncertain whether it will be able to exert the same competition pressure as that currently exerted by Viviti. (FG/transl.fl)